Beijing puts giant media marriage on the rocks

By : Melanie LeeDate posted :2009-08-20 02:10:00

SHANGHAI (Reuters) - China's leading Internet portal, Sina Corp (SINA.O) is likely to call off its planned $1.4 billion purchase of Focus Media's (FMCN.O) core assets if the government fails to bless the marriage by a September deadline.

Since Sina unveiled the deal in December -- the largest in China's opaque media sector -- China's commerce ministry has repeatedly put off reviewing the deal, asking for additional documents, frustrating both Nasdaq-listed companies.

Sina and Focus have the option to either extend their talks or walk away by Sept 30, in a deal many analysts believed would bring about much needed consolidation in the crowded sector.

Analysts -- many with broad access to company officials -- have offered a wide range of reasons on why the deal is faltering, ranging from anti-trust concerns to likely pressure from China's two top state-run media firms.

One analyst said his checks with Sina management indicated the company will not pursue a deal after September.